Slick Willey

Before you cry too many tears for Kathleen Willey, consider the unfortunate brother and sister she fleeced.

By Bruce Shapiro

Published March 18, 1998 8:00PM (EST)

Like most people who saw Kathleen Willey on "60 Minutes," I'm inclined to believe her. But then I was inclined to believe at least some version of Paula Jones' story. I don't doubt that President Clinton is a scoundrel and betrayer of the first order; anyone who would sell out his political constituencies as often and with as much ease as Clinton probably wouldn't hew to a higher standard in his intimate life.

But that's sentiment; law is another matter. Despite all the Monday-morning prophecies of doom, don't look for Willey's testimony to fundamentally change the legal calculus in either Jones' lawsuit or Kenneth Starr's investigation. The reason: Willey may be a weaker witness than her "60 Minutes" interview suggests. On "60 Minutes" and elsewhere, she is being portrayed as a "White House volunteer," as if she were some sort of Junior-Leaguer who'd somehow managed to register Democrat. But a story buried in two case files of the Virginia Supreme Court, so far overlooked in the national media, paints a different picture: of a woman, however traumatic her presidential encounter, with enough credibility problems to set a good trial lawyer salivating.

First, the background. Willey's late husband, Edward, was the son of one of the most powerful politicians in Virginia, Edward Willey Sr., a legendary state Senate finance chairman and a pillar of the white Richmond establishment. Thanks in part to Ed Sr.'s connections, Ed Jr. built an astonishingly lucrative practice as a real estate development lawyer. In the 1980s, Ed and Kathleen Willey -- joint proprietors of a family corporation -- became real estate-speculation millionaires, much like Clinton's high-stakes friends back in Arkansas, Jim and Susan McDougal. They had enough money for a condo in Vail, Colo., and carved out a niche as prominent Democratic Party fund-raisers and cronies of Gov. Douglas Wilder. It was Wilder, apparently, who introduced them to his friend Bill Clinton.

A few details of what happened next have made their way into the press. When the real estate market crashed at the end of the 1980s, Ed Willey apparently kept up the illusion of wealth by concocting various real estate pyramid schemes. Reality eventually caught up with the Willeys, though. In 1993, his Vail home already confiscated by the IRS, Ed Willey was caught embezzling $255,000 from Josephine Abbott and Anthony Lanasa, a brother and sister who'd hired him for a condo deal. They threatened to file a complaint with the Virginia Bar Association. So Kathleen and Ed Willey both signed a contract promising to pay back the $255,000 Ed had stolen from his clients, plus 6 percent annual interest. It was this crisis that brought Kathleen Willey to the Oval Office that afternoon in November 1993, and it was this crisis that precipitated Ed Willey's suicide the same day.

But those two Virginia Supreme Court rulings, Abbott vs. Willey and Lanasa vs. Willey, tell an additional story. It turns out that after Ed Willey's suicide, Kathleen abruptly decided not to repay the debt, even though Ed had left her the beneficiary of some $350,000 in life insurance. At the same time, as the Richmond Times Dispatch has reported, Willey started calling Abbott's and Lanasa's lawyer in the middle of the night, blaming him for her husband's suicide. So frequent were the calls that a judge finally issued a warrant for Kathleen's arrest on a harassment charge, though no arrest was ever made.

Still trying to recover their stolen assets, in 1994 Abbott and Lanasa sued Kathleen Willey. According to the Virginia Supreme Court records, Willey accused the brother and sister of "extortion." The jury didn't buy her charge and ordered the money repaid.

According to Virginia court records, when Abbott and Lanasa tried to collect, they were in for another surprise. They'd expected that their stolen money could be recovered through Ed Willey's life insurance policy. But it turned out that Kathleen Willey had already executed an evasive run through a legal loophole: She'd transferred her life insurance benefits to her children. Officially, Kathleen Willey was destitute and the money uncollectable -- yet her adult children were supporting her to the tune of $54,000 per year out of that same life-insurance fund.

Feeling decidedly re-fleeced, Abbott and Lanasa sued Kathleen Willey a second time, charging that Willey's actions amounted to fraud, a transparent attempt to evade a legal contract. On Jan. 10, 1997, the Supreme Court of Virginia ruled on the case. In an opinion written by Judge Leroy Hassell, the court agreed that Kathleen Willey had deliberately shifted her life insurance proceeds, but could find nothing in state insurance law to stop her. Willey had beaten her debt.

This doesn't make Kathleen Willey into, say, Linda Tripp. She's still basically a sympathetic figure: Placed in legal jeopardy by her husband, who then compounded the betrayal by committing suicide; and then, by her account anyway, molested by the president of the United States, to whom she'd turned for help. But she is a far savvier and more self-interested figure than portrayals would suggest. Kathleen Willey has played fast with money and with her own contractual commitment. She falsely charged her husband's clients with extortion, and vented enough hostility to convince a judge to issue an arrest warrant. With that track record, neither Ken Starr nor Paula Jones' team can be ready to bet the farm on her testimony.

Bruce Shapiro

Bruce Shapiro is national correspondent for Salon News.

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